Report Looks at Ways to Mitigate Sequestration

If the administration and Congress work together, they could blunt the impact of an across-the-board government budget cut for about one month, says a non-profit federal budget watchdog organization.

The government is scheduled to begin shedding nearly $1 trillion from its budgets beginning in January under the penalty for failing to reduce the deficit known as sequestration. The non-profit OMB Watch maintains that sequestration is a poor policy choice, but says the government could buy time to replace it.

"If sequestration is triggered, if the administration chooses to take action to lessen its impacts, and if it lasts just a few weeks and is retroactively canceled, then there would be minimal or no damage to most affected federal defense and non-defense programs," says Patrick Lester of OMB Watch.

The analysis details a number of different strategies for the government to use in lessening the effects of the cuts. For starters, the Anti-Deficiency Act gives the administration’s Office of Management and Budget limited latitude to continue current levels of funding for a brief period to buy time for Congress to cancel sequestration. Non-defense agencies can use unobligated balances from previous fiscal years to cushion the blow of sequestration.

Existing contracts will be less vulnerable to cuts, the analysis says. "Sequestration only reduces budget authority -- the legal authority that federal agencies have to obligate federal funds to various projects," according to the report. "Most existing contracts were negotiated in previous years and were fully funded from budget authority allocated in those years. Such contracts would not be affected by sequestration."